Professional Documents
Culture Documents
ABC - Authorities Buying Consortium
ABC - Authorities Buying Consortium
The largest non-profit making purchasing agency in Scotland, serving the buying needs of the
public sector, charities and voluntary organisations.
Aggregation
Adding together the value of separate contracts for the same supply contract, works or
service
Appraisal
A detailed assessment of the general capacity of a contractor, supplier or service provider to
meet certain pre-determined criteria or standards.
Approved List
A list of approved suppliers, contractors or service providers who have been pre-selected
(usually through a tendering process) and from whom goods and services must be procured.
See also Preferred Supplier List.
Award
The issue of an order or contract to a supplier as a result of a competitive tendering/bidding
process.
B
BAFO – Best and Final Offer
The detailed and fully priced offer submitted by a respondent for a contract, which
represents their lowest price.
Benchmarking
A process of continuously measuring and comparing an organisation's processes against
comparable organisations to gain information to help performance improvement e.g. ‘best-
in-class’ achievement.
BME or BAME
Black and Minority Ethnic or Black Asian and Minority Ethnic (EMB means Ethnic Minority
Business)
BV - Best Value
The Government’s alternative to the old Compulsory Competitive Tendering (CCT) system.
The principles make clear that the duty of best value applies to all local authority services.
The framework to put it into effect should promote local accountability and continuous
improvement in service performance.
C
Call Off Contract
A contract made following a formal tendering process with one or more contractors,
suppliers or service providers for a defined range of works, goods or services covering terms
and conditions (including price) which users ‘call off’ to meet their requirements.
Competitive Dialogue
A variation of the negotiated process, now available under new European Union Rules, that
allows different options to be discussed before a particular solution is selected. It can be
used in complex contracts where technical solutions are difficult to define or where the
buyer needs the best solution to be developed.
Consortium
An unincorporated group of firms or individuals which has been formed with a view to
pooling their strengths and resources to win contracts that they would not be able to in their
own right.
Contract Documents
Documents incorporated in the enforceable agreement between a public sector body and a
contractor, including contract conditions, specification, pricing document, form of tender
and the successful tenderers responses (including method statements), and other relevant
documents expressed to be contract documents (such as correspondence, etc.)
Constructionline
For public sector contracts in construction – the UK's register of local and national
construction and construction-related contractors and consultants
www.constructionline.co.uk.
The subscription involves pre-qualifying and so is used by many public sector buyers to
select suitably qualified (local) suppliers.
Core competencies
What an organisation does well – its key business – as opposed to other products or services
that it can or could offer.
Corporate Governance
An organisation’s system of rules, procedures etc used to manage and fulfil its legal, financial
and ethical obligations.
Cost Plus
The method of payment for contracts for which tenderers quote a lump sum or % addition
(margin) to their costs.
Culture
An organisation’s management, ethics, style and values.
D
Daily Rates
The method of payment for contracts for which tenderers quote rates per chargeable day.
Dayworks
The method of payment for contracts for which tenderers quote rates per attendance hour.
Debriefs
Giving positive, constructive feedback to competing suppliers on their performance at
certain stages of the procurement process. It affords an opportunity for a supplier to
improve performance in the future. In public sector procurement, a debrief is a legal
obligation from the public body. There is no such obligation in private sector procurement.
Default
A breach of a contract condition, e.g. a delay in the promised delivery.
Deliverables
A collective name for the tangible goods and/or services that the supplier or contractor is
required to supply under agreement.
DE - Defence Estates
Responsible for the properties and lands owned by the MOD.
Diversity
Promoting equality and diversity is a duty the entire UK government take very seriously, and
is a responsibility shared by all government departments. Also see Equal Opportunities.
E
e-Procurement/e-Tendering
The Office of Government Commerce (OGC) defines e-Procurement as "The term used to
describe the use of electronic methods in every stage of the purchasing process from
identification of requirement through to payment, and potentially to contract
management." OGC specifically identifies that electronic enablement of the purchasing
process can include e-Sourcing, e-Procurement and e-Payment (including e-Invoicing).
Empowerment
Giving employees the necessary skills, knowledge, information and authority to enable them
to produce the specified outputs in the most effective and efficient way.
Estimate
A genuine and realistic price that represents an estimate for defined works, goods or
services, as required by EU rules or standing orders for the purposes of determining the
procurement process and ensuring adequate budget provision. This should not be confused
with an estimate from a contractor, supplier or service provided for a defined piece of work.
Expression of Interest
See Initial Expression of Interest.
Equal opportunities
The practice of ensuring that all employees and users of services receive fair and equal
treatment. Also see Diversity.
External Customers
The external customers of the organisation e.g. your customer’s customers.
EU Rules
The Public Contract Regulations 2006.
Evaluation
Detailed assessment and comparison of contractor, supplier or service provider offers,
against financial and quality criteria.
F
Firm Price
A price which is not subject to variation
Framework Agreement
A formal agreement with selected (or short-listed) suppliers. The purpose is to establish the
terms of contract – in particular with regard to price and quantity. In other words, a
framework agreement is a general term for agreements with a number of suppliers which
set out terms and conditions under which specific purchases (call-offs) can be made
throughout the term of the agreement.
Any person can request information under the act; this includes legal entities such as
companies. There is no special format for a request. Applicants do not need to mention the
act when making a request. Applicants do not have to give a reason for their request.
G
Goods
The physical products provided by a supplier, e.g. stationery, computer consumables,
construction materials, IT equipment.
Governance
The framework of authority and control within an organisation.
H
HSE - Health and Safety Executive
Government body responsible for health and safety regulation in Great Britain.
I
IEO - Initial Expression of Interest
High value public sector contracts are advertised via OJEU and usually start with asking
parties interested in bidding to write and express their interest in bidding. This is different to
a Periodic Indicative Notice (or Prior Information Notice). See also PIN.
Innovation
Genuinely new ideas for products, services, processes, systems and social interactions –
typically giving benefits to the contract.
Intellectual Capital
The value of an organisation that is not shown in its traditional financial accounts – the
intangible assets of an organisation and is the difference between market and book value
e.g. know-how, people, structure etc.
J
Joint Ventures – JV
A formal or informal partnership created to achieve a specific aim – typically to win a tender
or PFI, PPP etc.
K
Key Performance Indicators - KPIs
Specific measurements of service delivery within a Service Level Agreement.
See SLA.
L
Liquidated and ascertained damages
A genuine pre-estimate of the loss that the Authority will suffer if the contractor defaults
when performing the contract. This may form the basis of deductions from payments, which
will be calculated according to the specific circumstance relating to each type of contract.
Letter of Acceptance
A letter that creates an immediate binding contractual relationship between the Council and
the successful tenderer prior to entering into a formal contract.
Letter of Intent.
A letter informing a successful tenderer that it is the Council’s intention to enter into a
contract with them in the future but creates no liability in regard to that future contract.
M
Market Testing
The process of comparing the efficiency of in-house (or incumbent) services against tenders
from outside companies
Master Vendor
The primary supplier who will manage the project using a range of sub-contractors or sub-
suppliers and who is accountable to the end client for the overall performance of the
contract.
Method Statement
The document used in a tender process which sets out questions for the suppliers to answer
which helps the purchaser or procurement officer to understand how the goods or services
will be delivered.
Mission Statement
A short statement that describes the purpose of an organisation, why it exists and its aims.
Also see Vision.
MEAT - Most Economically Advantageous Tender –
The optimum combination of whole life costs and benefits assessed against pre-determined
evaluation award criteria which will normally be detailed in the Invitation to Tender (ITT) or
equivalent documentation.
N
NAO - National Audit Office
Its role is to audit the financial statements of all government departments and agencies, and
many other public bodies. They report on how well the expenditure of public money
achieves value for money (VFM) and improvements in the delivery of public services.
As such, an NDA protects non-public business information. NDAs are commonly signed when
two companies or individuals are considering doing business and need to understand the
processes used in each other’s business for the purpose of evaluating the potential business
relationship. NDAs can be "mutual", meaning both parties are restricted in their use of the
materials provided, or they can restrict the use of material by a single party.
In rare cases, the contract may state that the existence of the NDA itself cannot be disclosed.
Negotiated Procedure
For high-value public sector contracts (see OJEU) – only chosen suppliers are invited to
negotiate for a contract(s). This has limited use only e.g. extreme urgency, failure of
open/restricted procedures or repeat of similar contract.
O
Official Order
A pre-printed form, which incorporates the Council’s terms and conditions of purchase, used
to place an order with a supplier
OGCbuying.solutions – OGCbs
The Government's leading procurement services organisation for the UK; it is a non-profit
Executive Agency of the Office of Government Commerce in the Treasury.
Open Procedure
For high-value public sector contracts (see OJEU) – suppliers can apply without prior
selection ie going through a Pre-Qualification Questionnaire (see PQQ). The EU Directives lay
down the type of criteria which can be used to eliminate unqualified or unsuitable suppliers.
P
Parent Company Guarantee
A parent company guarantee binds the guarantor (the ‘parent company’) to fulfil and
complete a subsidiary company’s obligations and liabilities in the event of a failure by that
subsidiary to fulfil and complete its obligations and liabilities under a contract
Partnering Contracts
Contracts in which prices and specifications are not decided until after contracts are let,
usually to enable contractors to contribute to design solutions and other aspects of the work
(as proposed by the Government’s Construction Task Force, the Egan Committee).
Performance Bonds
Bonds or guarantees given to clients by specialist insurers, on behalf of contractors and at
their expense, binding the insurers to compensate clients (up to the amount of the bond
obtained) in the event of a default.
Procurement
The process of acquiring goods, works and services, covering acquisition from third parties
and from in-house providers. The process spans the whole life cycle from identification of
needs, through to the end of a services contract or the end of the useful life of an asset.
Partnerships
A working relationship between two or more parties either creating added value for the
customer or as a means to win contracts that individually they may not be successful with.
Partners can include suppliers, distributors, joint ventures, and alliances. Note: Suppliers
may not always be recognised as formal partners. (Also see Joint Ventures.)
Moreover, there is now a specific focus in public accounting to show that equal opportunity
has been afforded to small and medium-sized businesses, businesses owned and managed
by minorities and start-up concerns. Providing that a business can securely and
demonstrably meet the terms and conditions of the tendered contract, and has the logistic
and internal infrastructure to carry out the services to the levels demanded by the SLA
(Service Level Agreement), then it is usually assured of equal participation rights. All public
sector authorities are subject to European public procurement rules which are intended to
ensure an open and fair market for suppliers, a visible and auditable contracting process and
equal access to contract opportunities for all suppliers.
Apart from the provision of a consistent set of procurement rules across the EU, the
principal aims of the regulations are to eliminate discriminatory and uncompetitive practices
that run counter to the public interest and to ensure the good stewardship of public funds.
Variations to procurement regulations at local level are acceptable as long as they do not
contravene existing UK or EU rules, accounting principles or the requirements of statutory
legislation. It is also possible to have varying applications of the rules within a single
contract, by different purchasing officers or departments.
Q
Quality
The level of fitness for purpose which is specified for or achieved by any service, work or
product.
Quotation
A written or verbal price given by a contractor, supplier or service provider, after being
requested either orally or in writing. A quotation may be the written confirmation of an
earlier, oral offer.
R
RFI - Request for Information
An alternative term for PQQ.
Restricted Procedure
For high-value public sector contracts (see OJEU) – suppliers are selected by an open first-
round invitation eg a PQQ (see Pre-qualification Questionnaire). Any prospective supplier
can apply to be included in the restricted list for the contract. Those suppliers who then
meet the required criteria or ‘qualify’ will then be invited to tender. NB This is the most
common type of tender for high-value contracts.
S
Schedule of Rates
Lists of jobs, like those in bills of quantities except that they contain no quantities. Rates may
be inserted by tenderers, or by clients. In the latter case, tenderers specify their overall
percentages on or off these rates.
Shortlist
A list of suitable prospective suppliers that has been drawn up through a preliminary
evaluation exercise for a particular contract or procurement activity
Specification
A description of requirements and standards to which the goods, works or services should
conform. Also known as a statement of needs, a statement of requirement, an operational
requirement, or a brief. Its purpose is to present prospective suppliers with a clear, accurate
and full description of the organisation’s needs, to enable them to propose a solution to
meet them.
Stage Payments
An agreed percentage or part of the contract price, which is payable when specified stages
of completion/delivery have been reached.
Stakeholders
Individuals, groups or organisations that are affected by and/or have an interest in a
particular issue or organisation eg customers, partners, employees, shareholders, owners,
government, and regulators.
Standstill Period
Once the buyer has announced who it intends to award the contract to, a “standstill peiod
will follow. This is when suppliers can ask for feedback on the award decision and also
challenge the decision if they wish to.
Storyboard
A technique for outlining the contents of each section of a tender response, bid or proposal.
There are several organisations, such as Sant, Concurrence and Pragmatech, who provide
software specifically for the purpose of producing tender responses quickly and effectively.
Sub-contracting
The process where a contractor assigns part of the contract to another contractor(s)
Supplier Engagement
In simple terms, working with suppliers to achieve mutual goals – as opposed to ‘them and
us’.
Supply2.gov
The website for accessing low-value public sector contracts www.supply2.gov.uk. You can
register for free and get free notification of opportunities in your local area for your business
(if you want to get notifications outside of your local area or detailed alerts, you need to pay
to upgrade).
Supply Chain
The flow of resources into and out of the enterprise's collective operations eg an IT supply
chain is the flow of resources into and out of its IT operations. The chain can be said to start
with the suppliers of your suppliers and ends with the customers of your customer.
Sustainable Development
A widely-used and accepted international definition is: 'development which meets the needs
of the present without compromising the ability of future generations to meet their own
needs' e.g. the environmental and social impact of today’s actions that may affect the ability
of future generations.
Sustainable Procurement
The application of sustainable development principles to procurement (see above).
T
Tender / Tendering
A formalised process of bidding for work or contracts. See ITT.
Tier 1 Supplier
An organisation at the top of the supply chain providing goods or service directly to the end
client – also known as the Main Contractor.
V
Values
Represent the beliefs within an organisation and are demonstrated through the day-to-day
behaviours of its employees.
Vision
A statement describing how an organisation wishes to be in the future.